Oil falls on oversupply fears after build in U.S. crude stocks

TOKYO, Oct 28 (Reuters) - Oil prices slid more than 1
percent on Wednesday, paring the previous day's gains, as a jump
in U.S. crude inventories and surging COVID-19 cases raised
fears of an oversupply of oil and weak fuel demand.
In early Asia, Brent crude LCOc1 was down 61 cents, or
1.5%, at $40.59 a barrel by 0033 GMT, having climbed nearly 2%
the previous day. U.S. oil CLc1 was down 66 cents, or 1.7%, at
$38.91 a barrel, after gaining 2.6% on Tuesday.
U.S. crude oil and gasoline stocks rose last week, data from
industry group the American Petroleum Institute showed, with
crude inventories rising by 4.6 million barrels to about 495.2
million barrels, against analysts' expectations in a Reuters
poll for a build of 1.2 million barrels. EIA/S
"The higher-than-expected build in U.S. crude stocks
prompted fresh selling while concerns over supply disruption
from Hurricane Zeta have receded," said Hiroyuki Kikukawa,
general manager of research at Nissan Securities.
Energy firms and ports along the U.S. Gulf Coast prepared on
Tuesday for another test as Zeta, the 11th hurricane of the
season, entered the Gulf of Mexico. "Rising COVID-19 cases with the lack of a U.S. coronavirus
fiscal relief package also dented investors' risk appetite,"
Kikukawa said, predicting that the gloomy sentiment will keep
prices under pressure over the coming day.
Infections are surging again in the United States, with
nearly half a million people having contracted the coronavirus
in the last seven days. European governments, meanwhile,
prepared to introduce new restrictions to keep cases under
control. President Donald Trump acknowledged on Tuesday that a
coronavirus economic relief deal would likely come after the
Nov. 3 election, with the White House unable to bridge
differences with fellow Republicans in the U.S. Senate as well
as congressional Democrats. Adding to pressure, Libya's production should rebound to 1
million bpd in coming weeks, complicating efforts by other OPEC
members and allies to restrict output.